Credit Overspending

Rigid budgets break, so we built YNAB to be flexible. Overspending happens—your budget is here to help you get back on track. 

If you have general questions about covering overspending (or you want to know more about cash overspending), head over here. If credit overspending is what you're after, read on! 

There are two types of spending in YNAB—budgeted and non-budgeted. That's true for spending with cash, and for spending with credit. Of course, YNAB is helping you plan for your credit card payments, so credit spending is handled a bit differently. 

Budgeted Spending

When you make a purchase on your credit card that's budgeted for (that you assigned money to the category to cover), dollars will move to your Credit Card Payment category—they'll sit there until you're ready to pay the bill. 

In the account register, a $100 transaction is entered for Groceries. The payment bubble in the upper-right is updated.

Non-Budgeted Spending

When you use your credit card to buy something and you haven't budgeted for it, or haven't assigned enough to cover the entire purchase amount, dollars won't move to your Credit Card Payment category—you now have debt on the card you'll need to cover in the future. 

In the account register, a $100 transaction is entered for Groceries. A $100 Overspending bubble appears in the upper-right. Take a look at my Credit Card Payment category after the $100 budgeted purchase at the Grocery Store and the $75 non-budgeted purchase at Target:

I only have $100 for my payment! When I click on Activity, the pop-up gives me a breakdown: $175 in total spending, of which $100 was budgeted spending. This means that I can only afford to pay $100 towards my card, even though my balance is $175. 

Overspending as Debt

Ideally, you'll move money to cover overspending in the month it happens. If you do, YNAB has your back—dollars will be moved to the Credit Card Payment category for your payment and you won't have a care in the world when your credit card statement arrives. 

But what happens if you can't cover the overspending before the month ends? You've accrued debt. 

When the month rolls over, categories with credit overspending reset to $0—there's no need to assign money in the previous month to cover the purchase. You do owe your credit card company money, though, and you'll need to assign extra funds for a higher payment. Add funds directly to the Credit Card Payment category in the current month.  

Once the Available amount in the Credit Card Payment category matches what you need to pay—debt from previous overspending plus money for new budgeted purchases—you can confidently make your payment.

Of course, there may be a month where you aren’t able to cover the overspending right away. Not to worry! Set a target so you can budget for it over time. 

Need a refresher on credit card payments? We've got you covered.

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